Chrysler bankruptcy, will take over the U.S. government and Fiat

One of the Big Three U.S. automakers, the world's fifth largest car company in the Motor Company entered the threshold of a century before the footsteps stopped. Obama President of the United States announced that the United States Bankruptcy Code in accordance with Chapter 11 bankruptcy proceedings, Chrysler in the U.S. time on April 30 formally filed for bankruptcy protection. After the bankruptcy reorganization by the U.S. government and the Italian carmaker Fiat to take over Chrysler assets.

Chrysler from Daimler - Chrysler Union before decomposition into a desperate struggle on the state, the Bush administration launched the 17.4 billion U.S. dollars rescue plan is only to allow Chrysler to live for a few months of this year 3 Obama on the 30th on the Government rejected Chrysler's reform program, such as 30 days in the proposed re-introduction of the restructuring plan with Fiat to get six billion U.S. dollars of loans, etc. At the same time, paving the way Obama Government -- - bankruptcy would be the best option.

30 pre-restructuring
Period of 30 days, Chrysler has completed a series of major adjustments, on the one hand for the continuation of government assistance and to maintain and ready to continue to operate; On the other hand, as well as possible to clear away obstacles to bankruptcy reorganization. More than 10 billion U.S. dollars of the debt restructuring will be part of one of the most core. UAW United Auto Workers union is Chrysler's largest creditors, the two sides in 2007 in accordance with the agreements signed between the UAW Chrysler to pay more than 10 billion U.S. dollars the cost of medical care and welfare. After lengthy negotiations, 26 April, Chrysler and the UAW reached a tentative agreement to replace the labor contract in 2007. The largest possible debt restructuring, and the negotiations between Fiat can also continue to deepen it. At the same time, the U.S. Treasury Department has also reached a preliminary agreement with the UAW, Chrysler bankrupt in the union members will ensure that pension and medical fund to pay are met. April 28, the U.S. Treasury on the reduction of Chrysler debt, including JPMorgan Chase, Morgan Stanley, Goldman Sachs and Citigroup reached an agreement four major creditors, they agreed to accept two billion U.S. dollars in cash, to write g leisler 6,900,000,000 U.S. dollars of debt. Prior to this, these four creditors have requested that their claims to shares of Chrysler, the U.S. government to intervene in order to avoid large consortia lead the automotive industry, as well as unfair competition to avoid weakening the Government's control of the Chrysler bankruptcy and creditors to give up debt-equity swap. Although Fiat has not been in the meantime issued an official statement, but the two sides in accordance with previous agreements signed between Fiat and its platform will be small cars, Chrysler engine technology in exchange for 20% of the shares to become its second largest shareholder . Other stakeholders, is currently the second largest shareholder of Daimler Chrysler Group, also in early April to 1.95 billion U.S. dollars to the Abu Dhabi Investment Company Aabar to sell 9.1% of the shares, thereby diluting its Klais Le's share.

Chapter 11 path
Chrysler in the 30 days of efforts although the results achieved over the past few years with its creditors, the outcome of the negotiations, but still unable to return to days of bankruptcy reorganization is to enable the entire enterprise and to maximize the interests of creditors to be the best way to save.

United States Bankruptcy Code is the protection of Chapter 11 bankruptcy and reorganization proceedings, in accordance with the legal procedures, Chrysler can maintain control of the business and continue to operate day-to-day operations (including manufacturing, sales, procurement, etc.) at the same time to solve its financial and operations issues. But at the same time, this is a market combined with the policy of the bankruptcy proceedings, the U.S. government in this process given the priority of the right of redemption, but the U.S. government debt may also be requested as an alternative to the shareholders of the holding company Cerberus status in order to better lead the reorganization of Chrysler. At press time, the U.S. government and the Chrysler bankruptcy reorganization regard is given not on the specific programs. Chrysler Group owns Chrysler, Jeep and Dodge brands. Jeep is the only one which has been a high-quality assets on the brand, and its follow-up R & D has been going on; Chrysler and Dodge brands serious aging product line, the lack of market competitive products. So the most important step in the reorganization will be to rely on the small car from Fiat plans to introduce products for market demand. Financial and personnel aspects of the reorganization will be in the United States under the auspices of the Ministry of Finance, the new financial system and board members will soon begin the process of leading the reorganization.

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